The firm comments, "In our view, several key electoral victories broke in Tenet’s favor (Presidential, Senate, California Proposition 30), guidance for 2013 EBITDA is achievable, and significantly improved multi-year visibility warrants a higher target multiple (increased to 6.5x from an historical low of 5.0x, more consistent with the industry level). We believe that Tenet has crossed a bridge to greater multi-year visibility on its operations by demonstrating the earnings benefits of its operational programs (MPI, outpatient acquisitions, Conifer, etc.), thwarting a hostile bid for the company during a transition phase, and soon benefitting from a multi-year tailwind for the industry. Additionally, we believe that the company may be taking a more conservative stance on earnings guidance. We now have Outperform ratings on all seven publicly traded hospital operators, owing largely to our expectation for margin expansion in 2014 and sustained, incremental Affordable Care Act (ACA)-driven growth in the successive years."

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